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1 Introduction In order to understand how Toyota Company have improved its supply chain performance in terms of responsiveness and efficiency we should examine four supply chain drivers inventory transportation facilities and information Above-mentioned drivers not only determine the supply chains performance in terms of responsiveness and efficiency they also determine whether strategic fit is achieved across the supply chain Consider this framework for Toyota Company as the objective of my analysis Toyotas competitive strategy is to be reliable manufacturer of different models of quality cars This strategy dictates that ideal supply chain for Toyota will concentrate in responsiveness but also should be efficient Its supply chain consists of decentralized but interlinked units that engage in local experimentation and actively pursue learning and resource transfer across units Toyota effectively uses four supply chain drivers to show best performance Later while analyzing each driver you will be able to see it Inventory One of the key goals of Toyota is to reduce inventory at the line side of the plant and throughout the supply chain It does it with the help of crossdocking which support all of Toyotas plants in order to increase delivery frequency and reduce inventory Toyota reduces in-process inventory through Just in Time set of techniques The process is driven by a series of signals or Kanban that tell production processes to make the next part Kanban are usually simple visual signals such as the presence or absence of a part on a shelf JIT causes dramatic improvements in a manufacturing organizations return on investment quality and efficiency For example involves picking up from one supplier and delivering to the cross dock such as delivering kits to a plant Toyota may divide four pallets into 12 to 14 smaller orders in order to minimize inventory at the plant which can absorb some fluctuation in demand This means more frequent pick-ups of small lot levels done hour by hour Toyotas management initiatives
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